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Pan American Games in financial trouble, Olympic icon warns

A warning from Olympic icon Paul Henderson that the Toronto Pan Am Games could be billions over budget has caused a stir.

By Robyn Doolittle and Rob FergusonStaff Reporters

Tues., Jan. 3, 2012

Olympic icon Paul Henderson has caused a commotion in the province’s sporting community after sending an open letter to Premier Dalton McGuinty warning that the 2015 Pan American Games will come in billions over budget.

According to Henderson, the $2.4 billion budget is unrealistic, given the scope of proposed new builds and facility renovations. Organizers, he argues, have also failed to accurately account for a number of “soft costs,” such as additional pressures on police.

Henderson predicts that when the TO2015 board releases an updated business plan and budget in the coming months — the first official update since the 2009 bid book — the cost escalation “could well be from $1.4 billion to over $2.5 billion.”

Henderson, who ran Toronto’s failed 1996 Olympic bid and was an early supporter of efforts to bring the Pan Ams to Ontario, is not involved with organizing TO2015, but said in an interview Tuesday he made his comments based on his previous expertise with major multi-sporting events.

A spokesperson with TO2015 said the report is inaccurate.

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“TO2015 is working with the province and the federal government on the budget and we will share the numbers once approved. The budget is $1.4 billion — (the province is paying for the $1 billion athlete’s village) — and we are working within that scope.”

Henderson’s letter is the latest headache for the TO2015 team, which sources say is running behind schedule in most areas, save for the athlete’s village. CEO Ian Troop has said this is absolutely not true, but an investigation published by the Star in October showed that as many as a quarter of the venues are still not nailed down.

The most publicized setback has been TO2015’s inability to secure a location for a key new build, the velodrome. Sources say the organizers may need to rely on a temporary facility, which — while cheaper in the short-term — will leave no legacy behind, a key mandate of the Games.

“We know that the longer we delay it the more it will cost,” Shurman, the PC finance critic, told reporters. “I think the province of Ontario is mismanaging it. Get on with it.”

When pressed on where he came up with the specific dollar amounts, Henderson said he relied on his previous experience as well as news reports about the 2015 Games.

For example, Henderson added $22 million to the bottom line after learning a new badminton facility would need to be found because the one identified in the bid book has an inadequate ceiling height. Markham has agreed to build the new venue and pick up the tab. So even though the cost of the new building will not come out of TO2015’s budget, in Henderson’s view “it’s all still taxpayers’ money.”

In the letter to McGuinty, Henderson specified nine areas where savings could be found, such as combining multiple sport competitions in the same venue, hosting the Pan and Para Pan Games at the same time rather than consecutively and scaling back “over-the-top” facilities.

The Ontario cabinet minister overseeing the 2015 event said some of these ideas, such as paring down the number of sporting venues events at the Pan Am Games, are already under consideration.

Citizenship and Immigration Minister Charles Sousa accused Henderson of “making up a number” regarding potential cost overruns, although the government will not release internal figures of the latest budgeting.

“It’s not gonna reach the numbers he’s talking about,” Sousa insisted. “He’s using numbers based on the original bid book. Things have changed since then.”

A high-placed source involved in the Games said contingencies for overages have been built into the budget.

The source expanded on the minister’s comments, noting that many of Henderson’s suggestions have already been looked at and ruled out. For example, organizers had considered running the Pan Am and Para Pan Games at the same time, but the Para Pan sporting community shut down the idea.

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